In the closing weeks of the U.S. presidential campaign, the candidates are focused largely on the global financial meltdown, which is formidable enough. But looming behind this front-burner concern are the very difficult long-term economic challenges of restoring Social Security and Medicare to solid footing, and providing health care coverage to the millions of Americans who are uninsured or inadequately insured.

Wharton faculty say the candidates have done a better job of clarifying their positions on these difficult issues than their predecessors in prior elections. Still, they add, Senators Barack Obama of Illinois and John McCain of Arizona fall short of laying out richly detailed plans to solve the deep, structural problems with these programs, mainly because there are no easy solutions and speaking hard truths is likely to alienate voters.

"We were so concerned about the $700 billion in the bailout bill, but nobody is talking seriously about the $12 trillion we need to make Social Security whole and the $65 trillion we need to make Medicare whole," says Wharton professor of insurance and risk management Olivia Mitchell. She worries that that when it comes to Social Security and Medicare, both candidates are more focused on the revenue side of the equation than on addressing the rampant growth of benefit obligations which would require cuts for beneficiaries. Wharton professor Mark Pauly discusses the candidates' proposals to provide health insurance for more Americans.

Obama's plan for Social Security, she notes, focuses largely on a proposal to raise taxes on the nation's top earners. Obama would maintain the current cap on Social Security and Medicare taxes at income levels of $102,000. However, he would begin taxing again at $250,000, excluding only a so-called "donut hole" between $102,000 and $250,000. Mitchell says McCain's most noteworthy position on Social Security is his belief that younger workers should be able to invest at least a portion of their savings themselves in the stock market. McCain's plan also focuses on revenue, she notes, adding that the recent stock market slump has probably made that idea less palatable.

Obama seized on the current meltdown to criticize McCain's plan. At a September speech in Florida, he said, "If my opponent had his way, the millions of Floridians who rely on it would have had their Social Security tied up in the stock market this week." FactCheck.org called Obama's statement a "whopper" because the plan endorsed by McCain would not have allowed anyone born before 1950 to invest in private accounts. Mitchell says the real problem is that the current benefits kick in too soon, and are overly generous, to match incoming revenue and longer life spans.

According to Wharton insurance and risk management professor Kent Smetters, a former Congressional Budget Office economist, the Obama proposal would place a high percentage of the tax burden on one, small segment of the population and would only generate about 20% to 30% of the revenue needed. "There's not much talk about how to control growth on spending -- that's the real issue," says Smetters. "If you get more revenue, it doesn't solve the problem until you can control spending."

The current financial turmoil, Mitchell suggests, may actually help to reduce Social Security outlays as older people whose 401(k)s and home equity have shrunk will need to continue to work longer before tapping into their retirement accounts. "My sense is there will be a fair amount of interest in working longer and delaying retirement and postponing the end of the paycheck," says Mitchell. "But the issue is, if we do end up in a severe recession, does anybody want to hire these boomers who want to defer retirement?"

Mitchell cites current projections that suggest the government retirement system will remain solvent for the next eight years, so the current presidential candidates may not have to face its collapse on their watch. "They don't want to tread too much into the thickets of Social Security because they don't have to and it's just going to be painful. The details have been slow to come out and I think that's partly because Social Security is still believed to be the third rail of politics -- touch it and you die."

Smetters says that while Social Security is shaky, Medicare is even more troubling -- with a shortfall six times larger than the government retirement program. Beyond the magnitude of the gap, Smetters points out that Medicare is a tougher problem politically because it does not involve a simple cash benefit, but in effect puts a price-tag on beneficiaries' health, perhaps even their lives. "No one wants to talk about rationing medicine. No one wants to say this person's life expectancy is only so many years so this procedure is not worth the cost. It conjures up scary images. But we're going to have to have this discussion soon."

Smetters suggests that the next president appoint a genuinely bi-partisan commission to wrestle down these tough issues. He says a commission formed by President Bill Clinton fell apart because it was too free-wheeling and chaotic. George Bush established another more orderly commission, but, according to Smetters, the Democrats on the panel were hand-picked so as not to put up too much resistance. As a result, that commission had little credibility and came out with three fractured plans that led nowhere. Meanwhile, McCain has pledged to ask Democratic House Speaker Nancy Pelosi for a list of commission members and to "lock them in a room and withhold water and food until they come up with a reasonable plan." For any commission to succeed, Smetters argues, it would have to prohibit "demagoguery" and "fallacious" budget accounting. "This has nothing to do with liberal or conservative. It has to do with honesty."